Ethics: Accounting Scandals and Enron S Directors Essay Example

than the lives of animals? e. How and why does Nike disclose its policies and practices with regard to supply chain responsibility, and what are the major factors covered?

Bausch & Lomb’s Hazardous Contact Lens Cleaner Discussion of ethical issues 1. What lessons should be taken from B & L’s Renu experience? 2. What should Zarrella have done, and when?

Enron’s Questionable Transactions Discussion of ethical issues 1.Which segment of its operations got Enron into difficulties? 2.How were profits made in that segment of operations (i.e. what was the business model)? 3.Did Enron’s directors understand how profits were being made in this segment? Why not? 4.Enron’s directors realized that Enron’s conflict of interests policy would be violated by Fastow’s proposed SPE management and operating arrangements because they proposed alternative oversight measures. What was wrong with their alternatives? 5.Ken Lay was the Chair of the Board and the CEO for much of the time. How did this probably contribute to the lack of proper governance? 6.What aspects of the Enron governance system failed to work properly, and why? 7.Why didn’t more whistleblowers come forward, and why didn’t some make a significant difference? How could whistleblowers have been encouraged? 8.What should the internal auditors have done that might have assisted the directors? 10.How much time should a director of Enron have been spending on Enron matters each month? How many large company boards should a director serve on? 11.How would you characterize Enron’s corporate culture? How did it contribute to the disaster?

Arthur Andersen’s Troubles Discussion of ethical issues 1. What did Arthur Andersen contribute to the Enron disaster? 2. What Arthur Andersen decisions

were faulty? 3. What was the prime motivation behind the decisions of Arthur Andersen’s audit partners on the Enron, WorldCom, Waste Management, and Sunbeam audits – the public interest or something else? Cite examples that reveal this motivation. 4. Why should an auditor make decisions in the public interest rather than in the interest of management or current shareholders? 5. Why didn’t the Arthur Andersen partners responsible for quality control stop the flawed decisions of the audit partners? 6. Should all of Arthur Andersen have suffered for the actions or inactions of fewer than 100 people? Which of Arthur Andersen’s personnel should have been prosecuted? 7. Under what circumstances should audit firms shred or destroy audit working papers? 8. Answer the “Lingering Questions” in the case (p. 111 in the text).

WorldCom: The Final Catalyst Discussion of ethical issues 1. Describe the mechanisms that WorldCom’s management used to transfer profit from other time periods to inflate the current period. 2. Why did Arthur Andersen go along with each of these mechanisms? 3. How should WorldCom’s board of directors have prevented the manipulations that management used? 4. Bernie Ebbers was not an accountant, so he needed the cooperation of accountants to make his manipulations work. Why did WorldCom’s accountants go along? 5. Why would a board of directors approve giving its Chair and CEO loans of over $408 million? 6. How can a Board ensure that whistleblowers will come forward to tell them about questionable activities?